Sensex gains 750 points after 6-week losing streak
What's the story
India's equity benchmarks, the Sensex and Nifty, are showing signs of recovery after longest weekly losing streak of six weeks. The recovery is largely attributed to value buying and positive global cues. At around 3:10pm today, the Sensex was up by 765 points or 0.95% at 80,623 while Nifty gained by over 230 points to over 24,593.
Market dynamics
Value buying amid uncertainty
Today's market recovery is largely driven by value buying, especially after the equity markets recorded losses for six straight weeks. Santosh Meena, head of research at Swastika Investmart, said "momentum is still skewed to the downside," referring to uncertainty over US trade negotiations. However, he added that "the recent slide could trigger a technical rebound," with trade updates playing a crucial role in determining market direction.
Market indicators
Nifty approaching key support zone
Mandar Bhojane, Senior Technical & Derivative Analyst at Choice Equity Broking Private Limited, noted that the Nifty has formed six consecutive red candles on the weekly chart. This pattern indicates sustained selling pressure and is approaching a key support zone of 24,200-24,000. He said "any reversal near this zone could present a strong buying opportunity," with immediate resistance at 24,590.
External factors
Global cues and geopolitical developments
The global market is also influencing India's equity benchmarks. Major share indexes in Asia have risen, backed by strong corporate earnings in the tech sector. Wall Street futures are trading marginally higher after US stocks ended higher on Friday. Geopolitical developments such as the upcoming Trump-Putin talks on Ukraine could also significantly impact market trends this week, according to VK Vijayakumar of Geojit Investments Limited.
Economic indicators
Oil prices fall, SBI and Grasim Industries shares gain
Oil prices have fallen in Asian trade, extending declines of over 4% last week. This comes as investors await the outcome of talks between the US and Russia on Ukraine. Meanwhile, gains in Grasim Industries and State Bank of India shares after upbeat quarterly earnings have also contributed to positive market momentum. Grasim Industries shares jumped 2.2% after better-than-expected earnings while SBI's stock rose 2.2% following a 12.5% YoY profit rise driven by stronger non-lending income.